Arbor Realty Trust Issues Letter to Shareholders
UNIONDALE, N.Y., April 13, 2020 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE: ABR), issued a letter today to shareholders to provide a Company update.
Dear Arbor Shareholder,
Given the extraordinary impact of the COVID-19 pandemic on the economy, the financial markets and our daily lives, I want to provide an update for our shareholders on certain areas of our business and the steps we are taking to address the crisis. I assure you, as the Company’s largest shareholder, my primary objective is to maximize long-term shareholder value.
This unprecedented environment has caused significant disruption and liquidity constraints in many market segments, including the financial services, real estate and credit markets. Many commercial mortgage REITs have suffered from reduced available liquidity and significant margin calls on assets and securities that are financed through short-term repurchase facilities. We have always run our business with a heavy focus on the right side of our balance sheet, particularly in financing a large portion of our loans through non-recourse, non-mark-to-market long-dated CLO vehicles, as well as longer term unsecured debt facilities. That commitment to maintaining a strong balance sheet and careful capital management allows me to report that we currently have approximately $350 million in cash and available liquidity.
Our balance sheet portfolio is approximately $4.8 billion as of March 31, 2020 with $3.4 billion of debt financing those assets. Approximately $2.6 billion, or 76% of that debt, is in non-recourse CLOs and approximately $800 million is financed through warehouse and repurchase facilities with eight different banks that we have long standing relationships with. Additionally, the majority of the loans being financed in these bank lines are also rated and CLO eligible.
As of a month ago, we had approximately $350 million of securities financed with approximately $235 million of debt that were subject to margin calls related to changes in spreads. To date, we have paid $95 million in margin calls, which reduced this debt to $140 million. Recently we restructured a portion of this debt, and we now have $79 million of debt remaining, with margin call exposure, against $170 million of securities, reflecting a 46% advance rate. We feel that based on the reduced position and current marks that this is well within our ability to manage.